Consultations are under way with leading City shareholders, according to Sky News which claims the proposals will reduce the long-term incentive plan award available to Mr McEwan from £3 million to £1.75m from next year.

This will see his maximum LTIP award reduced from 300% of his £1m base salary to 175%.

It is thought the plan will be put to a binding shareholder vote at its annual meeting in the spring.

Mr McEwan, who is not eligible for an annual bonus, was paid £3.785m in 2015, comprising his salary, a £1m fixed-share allowance introduced to deal with new European Union pay rules, and a £1.347m share award from 2013 which vested last year.

RBS is expected to report another loss for 2016 – its ninth consecutive year in the red – and is due to settle with the US Department of Justice over the mis-selling of mortgage-backed securities.

The bank’s plans coincide with a report showing that the link between what senior managers are paid and a company’s financial performance is “negligible”.

The median pay for chief executives at Britain’s 350 biggest companies was £1.9m in 2014 – a rise of 82% in 11 years, according to a study by Lancaster University Management School.

However, performance as measured by return on capital invested was less than 1% during that period.

The report’s authors said the findings suggested a “material disconnect”.

The research suggested the need for “a more refined discussion about the type of performance measures employed” rather than remuneration levels and performance-related pay arrangements alone.

Chief executives of companies in the health care sector were the best paid, on an average of £2.9m, with those in the “basic materials” and oil and gas sectors on £2.2m, and telecommunications at £2.1m.

The lowest-paid sectors included technology on £1.3m and industrials (£1.1m).